DSGE Models in the Conduct of Policy: Use as intended

Refet Gürkaynak, Cédric Tille28 April 2017

Dynamic stochastic general equilibrium (DSGE) models are in wide use yet have come under sharp criticism, given their complex nature and the assumptions they rely on. However, many central banks use them in policy analysis. Is this a misguided use of economists’ and policy makers’ time? This eBook reviews the use of DSGE models in policy institutions, the lessons learned, and the desirable ways forward.